IDC gets serious about going green

2011-10-22 09:11

The Industrial Development Corporation this week launched the Green Energy Efficiency Fund. Mpho Sibanyoni talks to IDC chief executive Geoffrey Qhena about the fund

What is the total value of the fund?

The fund will be worth R500?million. We are getting the money from the German Development Bank and we will make the facility available over 15 years to entrepreneurs and businesses that want to be energy efficient. The interest rate will be at prime minus 2%.

Which sectors are going to be targeted?

We are not limiting this fund to any specific sector. Funding will be given to businesses that are energy intensive like manufacturing, mining and agro-processing.

The country is experiencing energy constraints and this fund will help businesses to reduce their electricity consumption by 20%.

Solar powered electricity is climate friendly and it would be good for our environment if factories used less coal and there was less pollution or electricity consumption.

Energy efficiency should be a strategic priority for companies, particularly given the fact that South Africa is moving to higher,
cost-reflective electricity pricing.

The fund will help Eskom – which has been under pressure – to save electricity and also preserve our environment. Funding will be given to South African registered companies.

We want to provide increased access to energy efficiency and renewable energy financing across all industry sectors.

What does the IDC plan to achieve by launching the fund?

We aim to encourage more companies that are energy intensive and ordinarily not focused on saving electricity, to contribute to saving energy.
If we get more people to use cleaner technology, we will contribute to a cleaner environment and develop positively as a country.

How is the IDC going to raise funds for the Green Energy Efficiency Fund?

The German Development Bank has loaned the IDC R500?million. We will take the money and then pass it on to the businesses that require energy efficiency funding.

As we speak we have been involved in roadshows and we have committed 10% of the fund to three companies in KwaZulu-Natal, Gauteng and Western Cape.

What should be the size of companies that apply for funding?

The companies must be small and medium enterprises, employing less than 200 people. I am not mentioning big companies because they normally have facilities in place to conserve energy.

Companies that want to access this loan must go to, our website.  The website contains instructions on how companies could apply for the loan.

If the companies think they qualify for the loan, they can then apply. Companies granted the loans will be allowed loan repayment terms of up to 15 years, depending on the energy efficiency or renewable energy technology. 

Standard IDC fees, credit policies and procedures apply.

How is the Green Energy Efficiency Fund going to be different from the other funds that the IDC already has?

The fund is different because it only talks about energy and will run for 15 years.

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